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8% of UK construction workforce comes from the EU

New figures from the Royal Institute of Chartered Surveyors (RICS) reveal that the UK construction industry could lose almost 200,000 EU workers post-Brexit should Britain lose access to the single market, putting some of the country’s biggest infrastructure and construction projects under threat.

RICS has cautioned that for Brexit to succeed, it is essential to secure continued access to the EU Single Market or to put alternative plans in place to safeguard the future of the property and construction sectors in the UK.

Latest RICS figures show that 8% of the UK’s construction workers are EU nationals, accounting for some 176,500 people. 30% of construction professionals surveyed revealed that hiring non-UK workers was important to the success of their businesses.

The UK is already in the grip of a construction skills crisis. While some overseas professionals, such as ballet dancers, are regarded as critical by the UK Government, and are therefore prioritised during the visa application process, construction professions have not yet been added to the ‘UK Shortage Occupations List’. RICS is warning that this could already be placing the UK’s predicted £500 billion infrastructure pipeline under threat and must be addressed as a priority.

When asked about the effectiveness of current plans to address the UK’s long-term skills shortages, 20% of respondents felt that apprenticeship schemes were not effective at all.

Jeremy Blackburn, RICS Head of UK Policy said “These figures reveal that the UK construction industry is currently dependent on thousands of EU workers. It is in all our interests that we make a success of Brexit, but a loss of access to the single market, has the potential to slowly bring the UK’s £500 billion infrastructure pipeline to a standstill. That means that unless access to the single market is secured or alternative plans are put in place, we won’t be able to create the infrastructure needed to enable our cities to compete on a global stage. We have said before that this is a potential stumbling block for the Government, which is working to deliver both its Housing White Paper and Industrial Strategy.

“A simple first step would be to ensure that construction professions, such as quantity surveyors, feature on the ‘UK Shortage Occupations List’. Ballet dancers won’t improve our infrastructure or solve the housing crisis, yet their skills are currently viewed as essential, whereas construction professionals are not.

“Of course, we must also address the need to deliver a construction and property industry that is resilient to future change and can withstand the impact of any future political or economic shocks — key to that will be growing the domestic skills base. As the industry’s professional body, we are working with Government and industry to develop that skills base, building vital initiatives, such as degree apprenticeships, in our sector to drive the talent pipeline forward. This survey reveals that more work needs to be done to promote the indisputable benefits of these schemes to industry — RICS intends to take this forward as a priority.”

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RIBA reveal what UK architects really think about Brexit

Results from the most comprehensive post-referendum survey of architects have been published by the Royal Institute of British Architects (RIBA). The RIBA Members Brexit Survey results give an insight into the major concerns and opportunities from architects across the industry.

  • 60% of architects have seen projects delayed, cancelled or scaled back
  • 40% of UK-based non-British EU nationals are now considering leaving the country
  • Architects think Brexit offers chance of wholescale reform of the UK’s inefficient public procurement system
  • Strong support amongst architects to maintain high product and environmental standards and ensure that UK architects’ qualifications continue to be recognised in the EU and are in future recognised in other key markets too.

Over 65% of architects are concerned about the impact of Brexit on their business and any uncertainty is unsettling. However, as agile and business-savvy professionals, architects have been quick to see the potential industry benefits from the UK exiting the European Union. From trade agreements with new markets, reform of the UK’s public procurement system and increased public sector and private sector investment, our members have made it clear that with the right decisions the short-term impacts of Brexit can be mitigated, and the UK can position itself as a global facing nation.

In response to the concerns and opportunities raised by its chartered members, RIBA has today published a set of five priority recommendations for Government: Global by Design: How the government can open up new opportunities for UK architects. In order to maintain and strengthen the UK as a global hub for architecture, the Government must ensure the UK:

  • Has access to the best talent and skills
  • Signs trade agreements that open access to foreign markets
  • Provides support for education, research and innovation
  • Takes action to address the UK’s competitiveness crisis including infrastructure investment
  • Maintains common standards and low compliance costs.

RIBA President Jane Duncan said “Architects recognise that the UK must shape a new role for itself after we exit the EU – and we are already responding to that challenge. But we need leadership and support from the Government if the UK is going to maintain and strengthen its role as a global centre for architecture, responsible for innovative and inspiring buildings in the UK and across the world.

“To do that we need the Government to secure the agreements that ensure that our qualifications continue to be recognised in the EU and increasing access to new markets outside of the EU, maintain high common product and environmental standards consistent with brand UK abroad and address the structural challenges that threaten the UK’s attractiveness as a place to live, work and invest.”

“I’m pleased that the Government’s Brexit White Paper highlights a number of the key issues that we’ve been raising with ministers, but there is still a long way to go – particularly on the issue of who can work here. We can’t shut our doors to talent and expect the world to open its markets to us. The UK needs an immigration system that recognises the benefits and importance of the UK being an attractive place to work for ambitious architects from around the world. It’s vitally important that the Government acts to confirm that those already working and studying in the UK will be able to remain.”

The RIBA Members Brexit Survey report and the RIBA’s Brexit recommendations, Global by design: How the government can open up new opportunities for UK architects, can be viewed at www.architecture.com/brexit.
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Theresa May’s industrial strategy “must address Brexit skills impact”

When Theresa May became Prime Minister, she announced that the UK government would develop an ‘industrial strategy’ to deliver a modern, innovative and competitive economy. Leading international infrastructure group Balfour Beatty are warning the government that projects such as HS2 run the risk of losing valued foreign workers post-Brexit unless tackling the skills shortage is made high priority within the strategy.

In Balfour Beatty’s latest publication entitled “Industrial Strategy: A Vision for Growth,” they highlighted that that around 2.2 million EU nationals working within the UK have helped make up a skilled workforce that the UK would be unable to source alone, should the free movement of labour be compromised.

The paper suggests that the heightened uncertainty surrounding EU labour in a post-referendum Britain risks causing severe recruitment and staffing difficulties. This in turn could lead to increased costs where demand for labour outstrips supply, resulting in long delays – especially on big projects such as HS2 and Hinkley Point.

The report says “An early and integrated policy response to both retain the skills of those who have migrated here and to ensure that the UK remains an attractive place for talented people to reside should be a key element of Government’s industrial strategy.”

Homegrown talent

Balfour Beatty has also stressed the importance of attracting and retaining new talent from inside the UK if we are to successfully thrive in a UK outside of the EU.

“The Government’s industrial strategy should also seek to address the skills shortage in the UK directly, by continuing to support the upskilling of our own workforce. If we want a successful industrial strategy then we must invest in the people who will deliver it, so skills, the investment in human capital, must be a priority in the industrial strategy. In this vein, we welcome Government’s plans to increase the number of apprentices by 3 million and introduce the Apprenticeship Levy.”

“However, we do not believe that the apprenticeship levy alone will be enough to meet the shortfall in skilled workers the infrastructure industry needs. To effectively resolve these skilling issues, we believe it’s necessary that for a collegiate approach to agree a clearly defined programme, designed through close interaction and genuine dialogue between government, industry and representative bodies, such as the Construction Leadership Council. Most importantly, the strategy should be adhered to over the long-term as we see in other countries such as Germany.”

Read the full report here.
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What happens to European Standards in a post-Brexit Britain?

Europe has led the world in improving building standards with the UK having played a key role in their development. But after the momentous day that was June 23rd and the UK economy appearing now to have weathered that initial vote-to-leave shock, where does that leave the construction industry in terms of EU regulations?

The British Standards Institution (BSI) is one of 33 voting members of CEN (European Committee for Standardisation). However CEN rules state that you can only join CEN if you are a member of the EU or about to become a member. In the case of non-EU countries including Norway and Switzerland, their membership in the European Free Trade Association (EFTA) qualifies them as well. When the UK finally leaves the EU it will therefore be essential for the UK to rejoin EFTA otherwise the BSI will have to argue for a change in statutes of CEN so that they can continue their membership of this organisation. And in that scenario, there may well be a lot of political pressure to keep us out.

But then what does that mean for the UK and what is the scenario of the UK walking away from the EU standard table? Any product intended for sale in the EU must meet the relevant EU standard. Non-compliance will clearly restrict markets. One of the key things about EU standards is that they do ensure a level playing field and are considerably better than each country having a different standard and system of compliance.

To add to this, the Construction Products Regulation (CPR) has, since 2014, mandated that all products produced for sale in the EU provide a declaration of performance and visible CE mark. In their BREXIT negotiation, the UK Government would be able to ignore the CPR and revert to BS standards instead of BS EN standards. This scenario seems unlikely as this would complicate matters with the possibility of two-tier standards. And that might a have a knock-on effect for manufacturers with variable production runs and increased stock levels.

And how does an EU standard compare to BS? Some BS testing is outdated and not as relevant to real-life scenarios. We tend to cling to some out of ‘habit’ when more representative standards exist. One such example is the adherence/preference of the UK to BS476 testing regimes for curtain wall perimeter fire barriers, when a specific EN test standard EN1364 offers a far more representative test option. The BS 476 standard tests curtain wall perimeter fire barriers in a static assembly, whereas the EN1364 tests simulate the dynamic movement of the curtain wall façade, which we would contend is a far more sensible and robust option. Siderise is amongst a very few suppliers who have opted for the EN1364 test, as we see it as far more representative of “real life”.

At the moment the UK has a vote and we can influence EU standards, and on occasion we could in theory ‘block’ standards that we did not like or at least modify them. One scenario is that we can go to meetings post-BREXIT, provide technical input, but in the end not have a vote – unless of course we negotiate some arrangement whereby we are allowed to vote. But that would appear to be fraught with difficulties. Whatever the outcome, we must not fall out of step with Europe. The costs to industry of totally abandoning EU standards are so vast as to be too horrible to contemplate.

By Chris Hall, Commercial Development Office, Siderise 
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Without skilled migrant workers the UK faces construction crisis, warns experts

Secure post-Brexit access to a skilled workforce or risk a construction crisis, professional bodies warn Government Brexit Minister, David Davis has been warned that the UK’s construction skills crisis could severely worsen, if the Government does not take steps to ensure access to a skilled workforce during its post-referendum negotiations.

The warning comes from a coalition of professional bodies representing the construction and built environment sectors. The Royal Institution of Chartered Surveyors (RICS), the Royal Institute of British Architects (RIBA), the Chartered Institute of Building (CIOB) and the Royal Town Planning Institute (RTPI) have written to the Secretary of State for Exiting the European Union, outlining their concerns around skills, as well as five other priorities that the UK Government should focus on in light of the UK’s Brexit vote.

The six priorities are:

Access to skills

The greatest strength of our sector is the skill of our workforce. The free movement of labour within the EU has been vital to the growth and flexibility)of the construction sector. Access to a skilled workforce of the highest quality and a focus on developing the next generation of home-grown talent are critical to ensure we can build the homes businesses and infrastructure we need to compete globally. We therefore urge the Government to explore options and approaches to ensure that this access is not impeded to the detriment of the built environment.

Common standards

We believe that the UK has much to gain from pursuing an approach that makes it easier to do business with trading partners new and old. Access to markets in the EU and around the world has transformed the UK construction sector. The mutual recognition of qualifications and the development of common technical standards have reduced the barriers our members face working abroad. Reducing tariffs and harmonising standards have helped UK firms of all sizes expand to Europe and beyond. These common approaches have also meant that UK businesses can support best-practice in environmental and product standards, supporting efforts on global issues such as climate change. It is imperative that governments in the UK protect and promote the UK’s role as a leader in environmental and consumer protection standards.

Research excellence

Our members have benefitted from the collaborative research that the EU has enabled and promoted. Our future success depends on maintaining these relationships, while forging new ties with research organisations around the world. In addition the continued success of our world class university courses training our young people in the built environment is essential to the underpinning of research and the continued supply of labour for construction and allied activities.

Infrastructure investment

The UK’s global competitiveness will be hampered unless we do more to tackle the major infrastructure challenges we face. With a housing crisis, and growing concerns around energy, telecoms, road, rail and airport capacity, the Governments in the UK must seek and entice prospective investors to consider infrastructure of all kinds. Providing confidence to the construction industry through infrastructure funding and development will provide stability during a period of uncertainty and ensure that the UK is well-placed to take advantage of growth opportunities in the future.

Devolution commitment

The referendum has brought divide between the different parts of the UK into sharp focus. Our organisations welcome the recent commitment to continuing the Northern Powerhouse and we believe that further devolution from Whitehall should be a key priority for the UK government as powers move from the European Commission. Devolution will enable a rebalancing of the economy so that all parts of the UK can benefit from any new opportunities arising from the UK’s new relationship with the European Union, and is an effective way of ensuring infrastructure spending is efficient, timely, coordinated and accountable.

Community development

Through the extensive skills and experience of our members we are best-placed to advise on how the built environment can unlock new opportunities and combat existing challenges, as well as provide places for people to live, work and play. Leaving the EU could present a great opportunity for the UK, but it should not be associated with a drive to the bottom in the environmental and building standards which future generations will live with.

RICS President, Amanda Clack FRICS, said “Recent RICS figures have shown that we are in the grip of our worst construction skills crisis in almost 20 years. There is a real concern within our industry that if access to a skilled workforce is further restricted, Britain could stop building. My colleagues and I would urge Government to keep this at the front of their minds when they come to negotiate our withdrawal from the EU.

“We know that infrastructure and construction investment is key to Britain’s economic growth. The uncertainty that immediately followed the referendum outcome led to decline in economic growth, increased market volatility and a reduction in UK infrastructure investment.

“While the initial post-Brexit slump appears to have stabilised, it is important that the Government focuses on maintaining infrastructure and construction investment leading up to and after Brexit, ensuring the right conditions are in place to attract infrastructure investors in all sectors across the UK.

“As we approach an unprecedented period of uncertainty, it is fundamental the government prioritises infrastructure and it remains at the forefront of maintaining a strong economy.”

RIBA President Jane Duncan commented “UK architecture, surveying, town planning and construction are flexible and innovative professions. I’m confident our members can help deliver strong economic growth in the UK, providing the buildings and infrastructure that meet the needs of our communities.

“With the right actions taken from the Government to address our industries joint priorities, we can tackle the challenges and exploit the opportunities that Brexit will bring. But unless we fix the housing crisis and address the economic imbalances in our economy, the UK won’t be in a position to compete internationally.”

Stephen Wilkinson, Vice President of the Royal Town Planning Institute, concluded “The UK is a world leader in environmental and building standards and in the professions which are involved in them. UK’s town planning expertise and university courses are among the most sought after in the world. Leaving the EU could present a great opportunity for the UK, but it should not be associated with a drive to the bottom in the environmental and building standards which future generations will live with.”

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Backing Britain is best

As someone who spent most of my childhood in rural areas, visits to London in the seventies were memorable for the bright lights of the West End, trips to the theatre, and a strange figure who tramped up and down Oxford Street carrying sandwich boards declaring “THE END OF THE WORLD IS NIGH”. Eventually we ceased to see him, though there have been plenty of doom-mongers since his time forecasting the end for humanity: such as former broadcaster, David Icke and more recently, David Cameron.

Whatever one’s viewpoint on the viability of our membership of the EU, most reasonable people would concede that the Prime Minister employed some pretty graphic predictions to try and persuade the public to stick with the project. In the end none of the dire warnings – nor the appalling warning on state pensions, uttered in the final days of campaigning as Project Fear morphed into Project Threat- were enough for the Establishment elite to divert the Eurosceptic majority. Indeed as I watched the PM’s wretched resignation speech in the immediate aftermath, I wondered just how large the majority would have been had he not mobilised the supposedly independent Whitehall machine to back Remain: 60-40, 70-30? For most of the people I know who backed the supposed status quo, did so despite deep misgivings over the EU’s trajectory of travel; opting instead to avoid any financial uncertainty.

So what did that financial shock actually look like? On the Friday morning, once the count became clear, shares in FTSE 100 and FTSE 250 companies plunged by as much as 40 per cent – before bouncing back strongly in the afternoon.

The UK’s housebuilders were amongst the hardest hit, but I am pleased to report that I stuck to my strategy stated in an MMC Magazine editorial, to hold my stocks throughout the Referendum campaign; and added to them substantially as the drama on the City’s trading floors unfolded.

I was in good company, however, as Berkeley Homes’ boss Tony Pidgley added approaching a million pounds to his personal stake in the regeneration specialist; and even Dame Kate Barker – a non-executive director of Taylor Wimpey – invested thousands in the hugely discounted stock.

You may recall it was Ms Barker who put her name to a report on housing supply in 2004, when Gordon Brown was still Chancellor, revealing how far short we were of the necessary number of new homes required. The Cowdenbeath Clunker famously went on to announce he was going to oversee the number of completions rise to 250,000 a year, just before the Credit Crunch and output fell to under 100,000. In case anyone is concerned about lack of demand in the foreseeable future, we have never got anywhere near the quarter of a million figure in the years since; while population rise has put further pressure on housing, schools, hospitals and other facilities.

Sterling or Gold?

Gold is always viewed by investors as a safe haven during turbulent times, while the Pound suffered a downward adjustment roughly half of what many economists had predicted was due for some years. And as I write, the lunchtime news is reporting a renewed drop in Sterling due to City jitters over commercial property sales, but this is also expected to prompt a further cut in the base rate to 0.25 per cent: which will bolster the attraction of house purchases if it is passed on to mortgage borrowers. Meanwhile confidence seems high in major manufacturers such as Rolls Royce, for whom wider markets look more accessible post-Brexit.

I am though sympathetic to businesses such as a wood machining company located near me, which reports it cannot pass on the currency connected price rises for its timber supplies from Europe, to customers here. In every scenario there are winners and losers.

Not only have the CBI back-tracked on its forecast of financial Armageddon should we vote Leave, but I have been encouraged by much of the widespread reaction to the Referendum result.

The building services research body, BSRIA, for instance declared it was ‘business as usual’ for its members and that the construction industry should remain confident and optimistic about the opportunities out there for existing and new industry projects. Indeed BSRIA is committed to offering ‘extra service to members during these uncertain times.

Julia Evans, Chief Executive, BSRIA, said: “Now that the dust has settled a week on from the Brexit decision – for BSRIA it is definitely business as usual – we are where we are. There are opportunities out there for our members to garner new work and deals – we all just need to find them.

“Against a backdrop of political and ‘economic spaghetti, BSRIA can lead and support its members into a bright new future. It is a brave new world. We appreciate there is certainly political turmoil, noise and volatility in Westminster – but BSRIA needs to join in this debate.

“As an industry – we must now start to shape future policy. Indeed it is a chance to revise industry regulations and to renegotiate the framework for the future and find new trade rules.

“We need to protect what has already been invested in and make the most of our assets – especially – investments and buildings. And ensure that investors have confidence in our industry. I was especially encouraged to learn that government ministers have begun efforts to reassure industry leaders that housing and infrastructure spending will not drop and in fact both will become ‘more important, not less’ after Brexit.”

Another positive perspective came from The Vinden Partnership, talking to UK Construction Online. MD Peter Vinden stated: “The effects of the result of the EU referendum are still being felt, with some of the initial reaction bordering on hysteria. The country now needs strong leadership to steady the ship and put Britain back on course.

“Instability surrounding the pound and the markets were inevitable once it became clear Britain had voted to leave the European Union. As the posturing stops and serious negotiations begin, it will become clear that Britain will not turn its back on trading with Europe. Likewise Europe, despite some of the more unhelpful comments being made from certain quarters, will realise it needs to maintain a favourable trading relationship with Britain.

“We have seen EDF confirm that the Hinkley Point power station project will remain unaffected by the vote. Likewise, Huawei will be pressing ahead with its billion pound investment programme.
“Britain will also be able to pursue advantageous trading relationships with other parts of the world. Already we are seeing trade talks begin with the likes of Australia, Canada, India and South Korea. The Brexit decision should be viewed as a great opportunity and we need to reinforce the message that Britain is open for business.”

Another point worth making is regarding the post-Referendum status of European nationals already here – including the many thousands working in construction. As I wrote in MMC – does anyone imagine that the day after a vote to Leave that Nigel Farage was going to insist on deporting his German born wife?

In fact the phalanxes of foreign staff – mostly salaried by the NHS – posting pictures of themselves on line (during work time?) with placards parading their nationality, are indulging in their own brand of scaremongering. How is their future status any different to that of an American, Australian, Indian or Nigerian living and working in this country?

In fact one of the few things our politicians seem able to agree on is that there will be no removal of EU citizens already resident in the United Kingdom; while most Brexiteers favour a points based system which will continue to admit people of any nationality whose skills are needed.

In time, with a fairer, more tightly controlled immigration system – rather than an open door to 500 million irrespective of their attributes or intentions – then we may just manage to balance our building and public services provision with demand. And then we will be in a far better position to offer sanctuary to genuine asylum seekers; for which this country has an admirable record going back centuries.

Remember when the monstrous Idi Amin launched his racist campaign against Ugandan Asians in the 1970s, we were able to accommodate some 30,000 people who arrived with virtually no possessions. But it was a far easier ask than trying to absorb 300,000 migrants, year after year.

Hopefully David Cameron and his taxpayer funded billboards will soon be just a bad memory, while I hope we can all find a way to work together and recall another government as well as a business backed campaign from the Seventies: “I’m backing Britain”.

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Carillion feeling positive following split from EU

Multinational facilities management and construction services company Carillion have released a half-year trading statement which suggests that Brexit will not affect them in the short term, although the long term changes are yet to be seen.

The statement highlighted that despite the economic uncertainty prior to the referendum and the subsequent fallout afterward, their support services have experienced revenue and margin growth and their work winning, order book and pipeline of contract opportunities are still strong.

Overall, the Group remains on track to make further progress in 2016.

The statement said “We continue to expect our full-year performance to be led by revenue and margin growth in support services, with Public Private Partnership projects, Middle East construction services and construction services excluding the Middle East also performing in line with expectations. Therefore, with revenue visibility for the full year of 97 per cent and a strong pipeline of further contract opportunities, the Group remains on track to make further progress in 2016.

“The referendum vote in favour of the UK leaving the European Union has obviously created uncertainty for the UK economy as a whole and therefore for businesses generally, including Carillion, and it is clearly too early to predict the extent to which businesses will be impacted by this result. However, Carillion has no significant operations in Mainland Europe and prior to the referendum we undertook extensive work to assess the possible impact on our business of a vote to leave and we have put in place robust plans to manage this outcome.”

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Is HS2 under threat from Brexit?

Suggestions have been made that HS2 is under threat of being cancelled, following the UK’s vote to leave the EU.

“The priority for the Government at this time will not be big sexy projects such as HS2,” said Lord Berkeley (Labour peer and Chairman of the Rail Freight Group).

This was a sentiment echoed by Richard Threlfall, head of infrastructure at KPMG, who said: “Getting attention on important strategic infrastructure decisions, I fear, has just got significantly harder.”

Before the Referendum, in June, Prime Minister David Cameron addressed Yorkshire residents at the Yorkshire Post’s offices in Leeds, and warned of uncertainty for the project if Britain left the EU.

“If we stay in [the EU] all our plans are fully intact and that includes HS2, and what we have said about HS3, and the overall rail investment programme,” he said.

“If we come out, of course I’m sure we will want to try and maintain these important investments. But when you hear nine out of ten economists, the Bank of England, the Treasury, the IMF and now the National Institute [of Economic and Social Research] all saying our economy will be smaller and will generate less tax revenue, obviously that does threaten potentially some public spending programmes.”

With uncertainty over the future leadership of the Conservative party and whether the new leader will be supportive of HS2, critics of the project are hopeful.

However, HS2 spokesman Ben Ruse said in RAIL Magazine “We are continuing to make HS2 a reality. It is business as usual and could very well be that HS2 is need now more than ever.”

Written by Stefanie Browne
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Brexit: “Business as usual,” says BSRIA

After last week’s shock decision for the UK to leave the EU, BSRIA says it is ‘business as usual’ for its members and that the construction industry should remain confident and optimistic about the opportunities out there for existing and new industry projects.

BSRIA have stated that they are committed to giving ‘extra service to members’ throughout this uncertain time.

Julia Evans, Chief Executive, BSRIA, said: “Now that the dust has settled a week on from the Brexit decision – for BSRIA it is definitely business as usual – we are where we are. There are opportunities out there for our members to garner new work and deals – we all just need to find them.

“Against a backdrop of political and ‘economic spaghetti’ BSRIA can lead and support its members into a bright new future. It is a brave new world. We appreciate there is certainly political turmoil, noise and volatility in Westminster – but BSRIA needs to join in this debate.

“As an industry – we must now start to shape future policy. Indeed it is a chance to revise industry regulations and to renegotiate the framework for the future and find new trade rules.

“We need to protect what has already been invested in and make the most of our assets – especially – investments and buildings. And ensure that investors have confidence in our industry.

“I was especially encouraged to learn that government ministers have begun efforts to reassure industry leaders that housing and infrastructure spending will not drop and in fact both will become ‘more important, not less’ after Brexit. The Mayor of London has also announced to boost housing.”

Industry cannot afford any period of parliamentary inaction and uncertainty on non-EU related issues, whether two years or more in length, and BSRIA seeks urgent reassurance from government that this will not be the case.

BSRIA is a non-profit distributing, member-based association, providing specialist services in construction and building services. More information at www.bsria.co.uk.

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“It’s not the end of the world” – A post-Brexit construction industry

The result of last week’s referendum on whether we remain or leave the EU came as a massive shock to everybody – the construction industry being no exception. We have been plunged into the unknown and understandably concern and fear has arisen. However, it isn’t all doom and gloom for the construction industry, and regardless of your opinion on the result it is everybody’s responsibility to roll up their sleeves and help make this work.

Strength in unity

Following 52% of UK voters deciding to leave the European Union, organisers of the UK’s largest construction event have called for a united front in the industry to face the challenges and opportunities ahead.

Nathan Garnett, Event Director for UK Construction Week, commented: “A new dawn for UK construction begins here. It is inevitable that our industry will experience a period of uncertainty and adjustment, but the construction sector has proved time and time again to be incredibly resilient. Now the result of the referendum is clear, we, as an industry, must move forward together with confidence. Leaving the EU will likely mean UK construction firms will be looking to invest in British products and services like never before.

“The UK boasts many long-term infrastructure projects and the Bank of England have made sound contingency plans for leaving the EU. The UK also has the foundations for a boom in house building, and the industry must and will be committed to meeting the national need for housing. Leaving the EU will inevitably attract new investors to our shores offering new opportunities, and that will happen sooner rather than later. The last few weeks and months have been uncertain for the UK construction industry, but now is the time to embrace the change and these new opportunities.”

“The reports of my death are greatly exaggerated.”

As social media reverberates rumours that the bottom has fallen out of the industry and the wider economy overall, many are actually quietly reporting that both the overall uncertainty and the subsequent result of the referendum have actually had little to no impact on their business activity.

In a year-end trading statement released this morning by Redrow housebuilders, Chairman Steve Morgan has indicated that annual profits were expected to be at the upper level of city expectations of £240m. “Although it is too early to tell whether Brexit will have any effect on future sales, initial feedback is that sites remain busy, reservations continue to be taken.

“Indeed, we witnessed long queues and strong reservations at new sites launched last weekend.”

David Orr, Chief Executive at the National Housing Federation has highlighted the importance of a strong stance as an industry. Speaking on behalf of the Federation, he said “We recognise the uncertainty that this result will bring to the sector and we are working with our housing association members to support them to continue delivering the homes and services this country needs. Whatever happens there is still a housing crisis and we remain committed to ending it.”

David Brown, the head of agency Marsh & Parsons, addressed the widespread moral panic gripping the housing sector in the Guardian. He pointed out that regardless of the result of the referendum there was still plenty of pent-up demand in the UK housing market “and a leave vote doesn’t change that overnight.”

He added: “When you think back to before the financial crisis and the volume of transactions we were witnessing on an annual basis, there’s clearly scope for further improvement. The decision to leave doesn’t alter the fact that plenty of people have to and still want to move.”

One reason perhaps that indicates that Brexit will not impact the construction industry quite as heavily as other sectors is that many construction companies work exclusively within the UK. A recent CBI study into the implications of British withdrawal from the EU, showed that construction is the second most domestically focused major UK sector, surpassed by a hairs breadth by Government. “It’s a domestic market, so while there are some that operate internationally, what really affects them is what they do in the UK,” says Suzannah Nichol, chief executive of Build UK.

Home-grown talent

Whilst the skills gap is likely to worsen in the short term, Brexit is perhaps the catalyst for change long term regarding the training and retention of a better homegrown workforce. According to the Federation of Master Builders (FMB) The UK construction industry has been heavily reliant on migrant workers from Europe for decades now – at present, 12% of the British construction workers are of non-UK origin.

Brian Berry, Chief Executive of the FMB, said “we need to ensure that we invest in our own home-grown talent through apprenticeship training. We need to train more construction apprentices so we are not overly reliant on migrant workers from Europe or further afield. That’s why it’s so important that the Government gets the funding framework right for apprenticeships – when you consider that this whole policy area is currently in flux, and then you add Brexit into the mix, it’s no exaggeration to say that a few wrong moves by the Government could result in the skills crisis becoming a skills catastrophe. The next few years will bring unprecedented challenges to the construction and house building sector, and it’s only through close collaboration between the Government and industry that we’ll be able to overcome them.”

In summary

In summary, the biggest immediate threat to the construction industry following news of our departure from the EU is widespread confusion, stalling due to a feeling of insecurity and failure to act going forward. Demand remains strong as shown by reports from some of the major contractors and housebuilder’s across the UK. The construction sector remains strong but we need to keep moving and resist succumbing to hype in order to ensure it stays this way. It has to be business as usual. Keep calm and carry on!

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